The Federal Government announced on Wednesday that it would be abolishing the age limit for superannuation guarantee contributions. The changes will take effect on 1 July 2013.
The changes were added to a deal which boosts the super guarantee of all workers from nine per cent to 12 per cent. The increase in the super guarantee will take a few years to add significantly to older workers’ nest eggs, so removing the age limit on super contributions is a real win for Australians looking to retire in the next short while.
It’s possible we shouldn’t be jumping for joy yet – the package of superannuation reforms is tied to the government’s mining tax, and if the mining tax is not passed then the superannuation reforms will not go through. This is because the Mineral Resource Rent Tax (the mining tax) will be used to partly fund the boost in superannuation. The government has done this for two reasons. The first is to ensure that some of the mining tax is going directly back into the community, and the second is to make it more difficult for the opposition to oppose the mining tax.
The original plan was to simply increase the superannuation guarantee contribution age limit to 75. But when Bill Shorton announced the “historic” changes yesterday he stated that “Australians should not have to work hard and retire poor”.
What about you? Do you think that the increased super guarantee and the abolishing of the upper age limit is too little too late to benefit those considering retirement now? Comment and let us know what you think.